Health

FAQ: A Young Adult's Guide To New Health Insurance Choices

October 11, 2013 — 12:03 PM

This is one of several explainers to help consumers navigate their health insurance choices under the Affordable Care Act, or as some call it, Obamacare. Click here for answers to other common questions. Have a question we missed? Send it to health@npr.org. We may use it in a future on-air or online segment.

So I have to carry health insurance?

Yes, just about everyone is required to have insurance as of Jan. 1, 2014, or else they'll be liable for a tax penalty. That coverage can be supplied through your job (including COBRA or a retirement plan), Medicaid or the VA, or an individual policy that you purchase. The penalty for not having health insurance, at least for 2014, is up to $95 per adult and $47.50 per child or 1 percent of your taxable income — whichever is greater. It does go up substantially in a couple of years, eventually to a maximum of 2.5 percent of taxable income. For more on the health insurance mandate and penalties, see this FAQ.

How long can I stay covered by my parents' insurance?

Nearly all young people can stay on their parents' plan until age 26, even if they're married, financially independent and no longer live with their parents. Young adults who are offered coverage through their own jobs can choose that plan or stick with their parents' plan if they prefer.

What if my parents don't have insurance or are buying subsidized coverage at an exchange is cheaper than staying on my parents' insurance?

Almost anyone can shop for coverage on the health insurance marketplace. But you will only be eligible for subsidies to reduce the cost of coverage under certain circumstances. If your parents don't claim you as a dependent on your tax return and your own income is between 100 and 400 percent of the federal poverty level ($11,490 and $45,960 in 2013), you could be eligible for premium tax credits on the exchange. But if your parents do claim you as a dependent, your eligibility for subsidies will be based on your family's income, not just your own.

Is there any reason not to sign on with my parents' plan?

Apart from general cost and coverage considerations, there are a few specifics to keep in mind when weighing a parent's plan. If you are studying or working in areas away from your parents' home, there may be no local providers who are in their insurance network, and going to out-of-network doctors or hospitals can be expensive. If you're healthy, delaying a doctor visit until you return home may not be a problem, but if you have chronic conditions that may not be feasible.

In addition, if you plan to become pregnant while on your parents' plan, you should check to make sure maternity benefits are covered. Although by law most group plans must provide maternity coverage for employees and their spouses, children aren't protected by the law, and employers don't always provide coverage.

What if my parents are on Medicare? Can I join them?

No. Medicare is primarily a program for individuals who are 65 and older. There's no family coverage available.

I'm a college student. How does the Affordable Care Act affect me?

The first thing students need to know is that if they DO have student insurance through their college or university, that's been deemed to satisfy the requirement that individuals have health insurance starting in 2014.

Then there's the question of what happens if you can't afford the insurance your school offers or what to do if your school doesn't offer coverage.

First, if you're a full-time student and you're not working, or if you're working just part-time, you probably don't earn enough to trigger the requirement to have health insurance. It applies only to people who earn enough to have to file income taxes; that's just under $10,000 this year for a single person under age 65.

Even the Bronze plan is too expensive for me. Are there other options?

People up to age 30 will have the option of buying a catastrophic plan that will cover only minimal services until they meet a deductible of roughly $6,400. The premium is usually much lower than the other plans. After the deductible is met, the plan covers the 10 essential health benefits — a kind of "safety net" coverage in case you have an accident or serious illness, according to the Healthcare.gov website. Catastrophic plans usually do not provide coverage for services like prescription drugs or shots. And there are other limits.

According to Healthcare.gov:

In the Marketplace, catastrophic plans are available only to people under 30 and to some low-income people who are exempt from paying the fee because other insurance is considered unaffordable or because they have received "hardship exemptions". Marketplace catastrophic plans cover 3 annual primary care visits and preventive services at no cost.

Can young adults qualify for Medicaid?

Depending on your income and where you live, some young adults may qualify for Medicaid under the law's provisions that expand coverage to individuals with incomes up to just under $16,000. States can decide whether to adopt the expansion; about half have done so. (See our FAQ on the Medicaid expansion here.)

This FAQ was produced through a collaboration between NPR and Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonpartisan health-care policy research organization. The Kaiser Family Foundation is not affiliated with Kaiser Permanente.